Tether Secured over 31 Mn USD Worth USDT in FTX Hack

Bahamian crypto exchange FTX announced on 11th November 2022 about filing bankruptcy under the Chapter 11 Bankruptcy code. The very same day, founder and CEO Sam Bankman-Fried stepped down from his designation. On top of the already going on worst phase, FTX took another bad omen in form of a reported hack on crypto exchange said to have lost about 600 million USD. 

The information shook the market already going through the trauma of the FTX collapse. While the USDT stablecoin issuer Tether took a proactive approach as soon as getting about the hack. 

Initially it was clear if FTX wallets are removing their funds in the wake of the exchange’s bankruptcy filing or a potential hack. In the matter of hours, it was clear that the transferring of assets was actually a hack. The confirmation made Tether take the initiative and soon it blacklisted the stolen amount in USDT stablecoin. 

Tether was reported to save USDT worth up to 31.4 million USD which were part of the siphoning assets during the FTX hack. 

Amount Might be not Significant, Efforts Were

Online blockchain sleuth ZackXBT detailed, out of the blacklisted USDT tokens by Tether, about 27.5 million USD worth assets were made up on Solana (SOL) while other 3.9 million USD worth USDT were from Avalanche (AVAX). 

Given the enormous amount of assets stolen during the hack, Tether’s blacklisted assets were not relatively significant. Hackers stole the assets in Ethereum (ETH), Pax Dollar (USDP) and Chanlink (LINK), etc. These assets are yet to recover or be treated alike Tether did while blacklisting the USDT. 

Tether’s move of allegedly stolen USDT blacklisting, potentially acted as demotivating the hackers involved in stealing the assets—while converting them into other assets or transferring them to another account. Following blacklisting, the stablecoin issuer could go with bruning the specific USDT and again issue the equal amounts of the assets. 

Exchanges Sharing the Reserve Assets Information

Following the FTX collapse allegedly due to using its customers’ funds for funding, trading, merger and acquisitions, lending, etc., many exchanges are making efforts to clarify their stance to their users. Prominent crypto exchanges like Coinbase, Crypto.com, OKX, Kucoin along with several others have either partially shared or committed to share their reserve’s proof. 

TheCoinRepublic reported earlier that Coinbase CEO, Brian Armstrong went on to Twitter and convinced the customers that their assets were safe with the exchange and backed by real assets in 1:1. Crypto.com took the initiative one step further where the exchange partnered with Nansen to create a dashboard showcasing the reserve assets and shared it with its users. 

Bitfinex was also reported to follow the same where Chief Technology Officer, Paolo Ardoino shared the information about 135 hot and cold crypto wallet addresses showcasing the proof of reserves of Bitfinex. 

Steve Anderrson
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